Mobile-home park residents at mercy of bank to stay put

Monday

Jul 27, 2009 at 12:01 AMJul 27, 2009 at 7:09 AM

Bob Crosty has spent nearly two decades living at Gem Suburban Home Park, long enough to raise children, grandchildren and great-grandchildren. But the future of his neighborhood is suddenly in doubt with the foreclosure proceedings filed against Gem’s owners, Capital First Realty of Chicago. For the time being, not much has changed at Gem Suburban: Crosty and his neighbors still have their homes and pay their rent. But the law doesn’t give them much of a leg to stand on if new owners decide to end the community’s 45-year run.

Sean F. Driscoll

Bob Crosty has spent nearly two decades living at Gem Suburban, long enough to raise children, grandchildren and great-grandchildren.

But the future of his neighborhood is suddenly in doubt with the foreclosure proceedings filed against Gem’s owners, Capital First Realty of Chicago.

The company has fallen four months behind on mortgage payments on the 96-acre manufactured-home community, prompting Wells Fargo to sue this month.

The park was founded in 1964 on 60 acres, according to Capital First’s Web site. It has 378 lots — the largest in the Rock River Valley, according to mobilehomepark store.com, a Web site dedicated to mobile-home investments.

For the time being, not much has changed at Gem Suburban: Crosty and his neighbors still have their homes and pay their rent. But the law doesn’t give them much of a leg to stand on if new owners decide to end the community’s 45-year run.

If the foreclosure suit ends with Capital First losing control of Gem Suburban, the residents would be at the whim of the new owners, with little recourse if the park closes.

Owners have few rights

Terry Nelson, president of the Mobile Home Owners Association of Illinois, said residents by law get a 12-month notice if an owner decides to sell or close a park. It’s unclear whether the same notice applies in a foreclosure suit, however.

“If it’s the lender, then it’s a whole different story. They’re selling it, so I guess it would be up to the lender,” she said. “What happens to (the residents)? It hasn’t really been tested.”

Cara Houck, attorney for Wells Fargo, said she couldn’t comment on the bank’s plans for the park if it prevails in the foreclosure suit. A receiver has been appointed to run the park’s daily operations in the interim, but Capital First still owns the land.

Crosty is concerned about the fate of the park. His home, like many others, is too old to move — and if it weren’t, the cost can be prohibitively expensive.

“If someone buys this place, we’d be screwed,” he said. “You don’t have much of a leg to stand on. ... All we can do is wait to see what happens next.”

Nelson and other mobile-home advocates are pushing for state laws that provide protection for residents who are at the whim of a new owner, such as giving them the right to become a resident-owned community.

Right now, however, the laws are lacking. “When land is sold, the homeowners are up a creek in Illinois,” she said.

No one immune

Capital First officials did not return multiple calls seeking comment for this story. But Robert Thieman, executive director of the Illinois Manufactured Housing Association, said mobile-home communities haven’t been immune to the recession.

“They face the same obstacles that other individuals face,” he said. “We seem to be more resilient because we are an affordable housing institution, but when all’s said and done, the recession has hit us all.”

In manufactured-home communities, residents typically own their homes, but they rent the plot they’re on. Owners make money off the land rental, sometimes even renting homes to residents, and pay for upkeep of the park.

Thieman couldn’t speak directly to Gem Suburban or Capital First — the company is not an Illinois Manufactured Housing Association member — but he said various factors could lead to a foreclosure.

“It could be that the vacancy rates are higher than normal. It could be that the community has fallen into a TIF district. If a government entity wants to use a piece of property in a certain way, it can cause an owner to think twice about keeping it.”

Crosty said more of the 378 lots are vacant now than at any point in the past decade.

“Half the people have moved out in the past 10 years,” he said. “A lot of them just pick up and leave. They’re gone literally overnight.”

Sean F. Driscoll can be reached at (815) 987-1346 or sdriscoll@rrstar.com.

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